Otter Tail Corporation (OTTR)

Return on total capital

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 387,272 390,528 404,103 399,245 377,919 362,780 357,797 372,810 390,439 406,657 365,052 303,808 249,708 206,508 184,709 152,796 147,886 151,164 135,690 134,600
Long-term debt US$ in thousands 943,734 943,663 943,592 943,536 824,059 823,998 823,941 823,882 823,821 823,760 823,699 734,074 734,014 594,619 624,540 624,485 624,432 764,274 724,389 724,318
Total stockholders’ equity US$ in thousands 1,668,500 1,633,330 1,565,650 1,497,460 1,443,010 1,402,930 1,328,440 1,263,780 1,217,320 1,184,020 1,116,540 1,047,140 990,777 952,482 915,123 887,866 870,966 852,070 822,055 800,019
Return on total capital 14.83% 15.15% 16.10% 16.36% 16.67% 16.29% 16.62% 17.86% 19.13% 20.25% 18.81% 17.06% 14.48% 13.35% 12.00% 10.10% 9.89% 9.35% 8.77% 8.83%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $387,272K ÷ ($943,734K + $1,668,500K)
= 14.83%

The return on total capital for Otter Tail Corporation has shown a generally improving trend over the past few years, increasing from 8.83% in March 2020 to 14.83% in December 2024. There were fluctuations in the ratio during this period, with some quarters showing higher returns and others lower.

The ratio experienced significant growth between March 2022 to September 2022, where it increased from 17.06% to 20.25%, representing a substantial improvement in the company's ability to generate returns on its total capital. However, there was a slight decline in the ratio in the subsequent quarters, reaching 14.83% by December 2024.

Overall, the increasing trend in the return on total capital is a positive indicator of Otter Tail Corporation's efficiency in utilizing its capital to generate profits. This suggests that the company is becoming more effective in generating returns for its investors and stakeholders, which can be indicative of strong financial performance and management. Further analysis of the company's financial statements and performance metrics can provide additional insights into the factors driving these changes in the return on total capital.